Unions begin legal challenge to ‘unfair’ change on pensions

UNIONS will open up a legal front tomorrow with the government over pensions, arguing that a switch in the way increases are calculated are “unfair” to millions of workers.

Six unions are taking action in the High Court to challenge using the consumer price index (CPI) instead of the traditionally higher retail price index (RPI) for the annual increase in public sector pensions.

The move, which came into effect in April, was announced by Chancellor George Osborne in the June 2010 budget, with unions arguing it was done without any consultation or negotiation, purely as a deficit reduction measure.

Unions claimed that because CPI is around 1.2 per cent lower on average than RPI, the loss to existing public sector pensioners will be around 15 per cent, with the change already affecting staff currently paying into career average schemes.

The unions’ case is that the move was not permitted under social security legislation, and that it reneged on assurances given by successive governments that RPI would apply.

Unions involved in the action are the Fire Brigades’ Union, teachers’ union NASUWT, Prison Officers Association, Public and Commercial Services union, Unison and Unite.

FBU general secretary Matt Wrack said: “The government actions are unfair and, we believe, unlawful. This is a vicious attack on existing and future pensioners that could cost them tens of thousands of pounds.

“Pensioners are being forced to bear an unfair burden for the financial crisis caused by the banks. Firefighters will be robbed of thousands of pounds while the bankers who caused the problems continue to count up huge bonuses.

“Hard-hit pensioners don’t feel ‘we’re all in it together’ when the Chancellor’s chums in the City still have their snouts in the trough at our expense.”

NASUWT general secretary Chris Keates said: “The question the court is being asked to answer is whether it is just and fair to arbitrarily change the basis on which pensions are calculated, reducing their value by thousands of pounds.

“The government’s actions are a breach of the contract with ordinary working people. We are looking to the court to make sure millions of ordinary workers will not be left facing a bleak and uncertain future at a time when cost of living is soaring.”

PCS general secretary Mark Serwotka said: “The switch from RPI to CPI is just another example of how this government wants public servants, pensioners and people entitled to benefits to pay the heaviest price for the recession.”

A protest outside the Royal Court of Justice in London tomorrow will mark the start of the legal action.